We strongly urge the SEC to issue clarifications which support the intent of Title IV to provide added options for capital formation to smaller firms. We are aware of many mature companies that have established proven business models and who have growing revenues, satisfied customers, and profits – but who currently lack options to raise expansion capital that is needed to fund their ongoing growth.

The increased capital limit of $50M under Title IV allows for more favorable economics to support the cost of fundraising – and will cause many more companies to consider this option.

Minimizing the overhead of maintaining compliance with blue sky laws through providing an overall exemption provided that shares are traded on regulated exchanges or sold to qualified purchasers will also go a long way to increase capital formation. In particular we would recommend that the SEC issue a definition of a “qualified purchaser” that allows for a larger investor pool than only those who are “accredited investors.” We believe that sufficient investor protections can be created by requiring that registered brokers act as intermediaries in the purchase of Regulation A shares – and that non-accredited investors who use registered brokers be allowed to invest.

In addition to assisting companies seeking to raise growth capital, we would like the SEC to take steps to increase the role of intermediaries to return back to reporting on smaller public companies and to provide useful information that can help investors make informed decisions on purchasing related securities. In part, this can be accomplished through providing more freedom for analysts to receive compensation from issuers to produce after market reports. We also support increasing stock trading spreads to allow more fees to be earned by brokers so that there would be greater incentives to invest in market making and reporting activities.

Many studies on job creation underscore that companies are spurred to significant added job creation post an IPO (see http://www.kauffman.org/uploadedfiles/post_ipo_report.pdf). We believe that the enhancements of Regulation A contemplated in Title IV could spark a wave of mini IPOs that would lead to significant growth in our economy at a time when private sector job creation is most sorely needed.

With election behind us, there is no time like the present to complete the needed work on Regulation A and create viable options for smaller firms to raise growth capital.